How Fines Became "The Cost of Doing Business"
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- Опубліковано 28 вер 2024
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In 2012 the Hong Kong, Shanghai Banking Corporation best known simply as HSBC was charged by authorities for aiding and abetting the operations of some of criminal cartels between the US and Mexico.
Corporate personhood is the legal notion that corporations have many of the same legal rights and responsibilities enjoyed by natural flesh and blood people. They can own property, sue and be sued, donate to political campaigns, and even have defended religious beliefs…
… but if a normal person was found laundering money for cartels and the North Korean Nuclear Program, they would be living it up, here in ADX Florence IF THEY WERE LUCKY.
HSBC on the other hand still operates across the world, and their punishment for these crimes would be like a normal person getting a fine for roughly 2 months of their wages…
So if corporations are legally people… why can’t they be arrested?
If companies see fines as “just the cost of doing business” what reasonable punishments are there for organizations that break the law which DOESN’T just end up punishing innocent employees and the wider economy more than it does the people with actual discretion over how these companies act?
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Commentaries on the Laws of England: Book I: Of the Rights of Persons
By Sir William Blackstone:
IV. We come now, in the last place, to consider how corporations may be dissolved. Any particular member of a corporation may be disfranchised or lose his place therein, by acting contrary to the laws of the society or the laws of the land; or he may resign it by his own voluntary act (f). But the body politic may also itself be dissolved in several ways-which dissolution is the civil death of the corporation: and in this case their lands and tenements shall revert to the person, or his heirs, who granted them to the corporation; for the law doth annex a condition to every such grant, that, if the corporation be dissolved, the grantor shall have again the lands, because the cause of the grant faileth (g). The grant is indeed only during the life of the corporation, which may endure for ever-but when that life is determined by the dissolution of the body politic, the grantor takes it back by reversion, as in the case of every other grant for life.] The debts of a corporation aggregate, either to or from it, are totally extinguished by its dissolution (h); for it has no longer a corporate character in which to sue or be sued, and as during its existence the members of it could not recover or be charged with the corporate debts in their natural capacities, so neither can they when it has ceased to exist.
A corporation may be dissolved-1. By the loss of such an integral part of its members as is necessary, according to its charter, to the validity of the corporate elections; for in such cases the corporation has lost the power of continuing its own succession, and will accordingly be dissolved by the natural death of all its members (k). 2. [By surrender of its franchises into the hands of the sovereign, which is a kind of suicide. 3. By forfeiture of its charter, through negligence or abuse of its franchises; in which case the law judges that the body politic has broken the condition upon which it was incorporated, and thereupon the incorporation is void (1). And the regular course, in such case, is to bring an information in the nature of a writ of quo warranto; to inquire by what warrant the members now exercise their corporate power, having forfeited it by such and such proceedings. The exertion of this act of law for the purposes of the state, in the reigns of King Charles and King James the second,-particularly by revoking the charter of the city of London,-gave great and just offence; though perhaps, in strictness of law, the proceedings in most of the cases that occurred were sufficiently regular. But the judgment against the charter of London was reversed by act of parliament after the Revolution; and by the same statute it is enacted, that the franchises of the city of London shall never more be forfeited for any cause whatever.
Commentaries on the Laws of England: Book I: Of the Rights of Persons
By Sir William Blackstone:
IV. We come now, in the last place, to consider how corporations may be dissolved. Any particular member of a corporation may be disfranchised or lose his place therein, by acting contrary to the laws of the society or the laws of the land; or he may resign it by his own voluntary act (f). But the body politic may also itself be dissolved in several ways-which dissolution is the civil death of the corporation: and in this case their lands and tenements shall revert to the person, or his heirs, who granted them to the corporation; for the law doth annex a condition to every such grant, that, if the corporation be dissolved, the grantor shall have again the lands, because the cause of the grant faileth (g). The grant is indeed only during the life of the corporation, which may endure for ever-but when that life is determined by the dissolution of the body politic, the grantor takes it back by reversion, as in the case of every other grant for life.] The debts of a corporation aggregate, either to or from it, are totally extinguished by its dissolution (h); for it has no longer a corporate character in which to sue or be sued, and as during its existence the members of it could not recover or be charged with the corporate debts in their natural capacities, so neither can they when it has ceased to exist.
A corporation may be dissolved-1. By the loss of such an integral part of its members as is necessary, according to its charter, to the validity of the corporate elections; for in such cases the corporation has lost the power of continuing its own succession, and will accordingly be dissolved by the natural death of all its members (k). 2. [By surrender of its franchises into the hands of the sovereign, which is a kind of suicide. 3. By forfeiture of its charter, through negligence or abuse of its franchises; in which case the law judges that the body politic has broken the condition upon which it was incorporated, and thereupon the incorporation is void (1). And the regular course, in such case, is to bring an information in the nature of a writ of quo warranto; to inquire by what warrant the members now exercise their corporate power, having forfeited it by such and such proceedings. The exertion of this act of law for the purposes of the state, in the reigns of King Charles and King James the second,-particularly by revoking the charter of the city of London,-gave great and just offence; though perhaps, in strictness of law, the proceedings in most of the cases that occurred were sufficiently regular. But the judgment against the charter of London was reversed by act of parliament after the Revolution; and by the same statute it is enacted, that the franchises of the city of London shall never more be forfeited for any cause whatever.
Fun fact: in America corporations have even more rights than citizens, like being able to buy machine guns manufactured after 1986.
Please don't replace a sustainable natural loofah with one of these plastic things.
Yes. If corporations are going to insist they’re people, they should “enjoy” the consequences of their actions.
I would start supporting capital punishment 😅😅😅
_No pun intended_ 😅
I've said it before, we need to pierce the corporate veil when fraud is involved.
@@WanderingExistence Came here to say this. If a company’s actions result in death of humans, and this is found to be willful, then they should be eligible for capital punishment.
Wouldn't executives be accessories to the crime?
this!!!
Any rule where punishment is monetary is just poor tax.
if you must do a fine, it should be a percentage of your yearly income / gross profits
Legal for a price
A "cost of doing business" is the phrase often used.
@@ohiasdxfcghbljokasdjhnfvaw4ehr
That still won’t work as flat taxes are still regressive and favor the rich. 10% of $200 can be way more impactful than 10% of 2,000,000 despite the latter being 10,000 times higher.
"If the penalty for a thing is a fine, that thing is only a crime for the poor"
How about nationalising the offending business? That is like death penalty for investors, so they will do all they can to avoid it. In the end if company still does that, gets nationalised and then state can sell it, recovering some of the damages back. A lesser punishment could be partial nationalisation, or fine equivalent to some amount of company value (say 30%) and jailing executives who have both failed to prevent it from happening and mislead investors about real business practices. In such case both investors would be incentivised to looks at what executives are doing more carefully and executives would be incentivised to be as transparent as possible.
it's a radical idea but it would get businesses to behave themselves and would heavily incentivise directors to keep a close eye on company management.
Depends on how you do the nationalisation. If you do a buyout it might actually be targeted.
That's only if you think governments are any better than corporations.
100% this, but also, the feds should stop doing free bailouts and instead only give money in exchange for controlling shares. If a business is "to big to fail", or "too important to the economy", then its too big and important to be privately owned.
@@agodelianshock9422 You are right IF the government is aiding and abbetting the corporations in violating the law by turning a blind eye (thanks to large campaign finance donations from them). IF not, then the corporations CEO and senior executives, would fear breaking the law.
I love how corporations can just argue "but that could cost me money" in a courtroom and that apparently trumps everything
As HMW said in the video, too much, and it could cause them to go under.
If you wrongly execute an individual, only a (relatively) small number of people (the individual executed plus their close friends and family) are impacted. But if you wrongly shut down a corporation, you harm hundreds-if not thousands or millions-more, from shareholders (who also might have actually been trying to stop them from doing said illegal actions) who lose their investment to employees who lose their job (and possibly livelihood) to customers (who lose whatever the business was providing).
@@jwil4286 if they're killing people by doing what they're doing and that's the only way they survive then they have no more right to be an acting company than a mob and I don't think anyone would oppose shutting down the mob despite the loss of jobs for all the mobsters and the people who work for them or get great tips from them would they?
@@pedromoura1446 how many innocent victims of a wrongful prosecution would be too many to you then? Or are you saying that it doesn’t matter how many innocents and bystanders are adversely impacted by a wrongful conviction just so we can take down the bad actors?
@@jwil4286 how many innocent victims of a malicious corporation would be too many for you then? Or are you saying that it doesn't matter how many innocents and bystanders are adversely impacted by a malicious corporation just so some jobs stay open?
@@jwil4286 of course not. i'm not advocating for a "kill 1 person to save millions" situation but we dont even need to go there.
we ALREADY dont allow the mob to run unimpeded because imprisioning them would put jobs at risk do we?
And dont we fine people for speeding despite people's lives being sometimes at risk if they dont reach a place quick enough (like a hospital)?
we also jail people for stealing despite the majority of theft being done by people who were pushed to doing so because they NEED that money to survive dont we?
Should we allow premeditated murder if the murderer has a family to sustain?
without effective court rulling those very "innocent" people would also be forced into doing illegal things all day every day, and even causing death of others for the company's benefit having no choice in the matter other than starve or screw others which, in the case of the health and insurance companies, already reaches several thousand deaths each year in the US.
Are those not "innocent victims"?!
EVEN IN WAR there's crimes we CANNOT condone wateaver the cost, so why should companies get away with that logic as defence?!
rants aside..all of these have systems in place to protect the people that might suffer inadequately from systemic problems caused by the process of punishing someone who caused harm to others.
in first place a social security system which offers free professional oriented training should be a must even outside of this conversation.
secondly we're talking about a company. no matter how massive (ESPECIALLY IF it's massive) it's assets WILL be bought, even if only the physical assets, and some, if not most, of their employees maintained.
I can even give you a real example of a, somewhat, successful way to deal with these situations.
We had a massive bank go bankrupt due to negligence here in my country and what we did was separate the toxic assets from the non toxic assets by their market valuation, we left the bad assets with their old stakeholders and CEO's and nationalized the viable part of the bank which was then reestructured and those assets sold to the highest bidder.
Almost none of their employees lost their jobs as their local branch buildings were bought by other banks and the branch employees maintained by contract with the state, not that it was absolutely needed as the buildings still required to be crewed and maintaining and older and already trained staff was cheaper than training a new one.
The CEO's were then prossecuted by the shareholders for their mismanagement.
i say SOMEWHAT successful because the process was both rushed and some power moves were done in the middle which reduced the success.
outside pressure from the richer shareholders (which ended up with them still receiving some baillout money for a bankrupt company ) and a lot of retirees lost a lot of money after being scammed by that bank into investing their life savings in it (which was now mainly composed of toxic assets) and went knocking on the state's doors trying to recover their money instead of prossecuting the old bank's CEO's (banks have both a refund insurance of at least 50.000€ per person and CEO's have a mandatory insurance for mismanagement, which the bank pays by taking it from you in their account management rates so it was not the state's problem by this point. though their actions were at least partially justified as we had an ex-prime minister tell the country on the news that the bank was fine and people believed that lying prick).
BUT in the end the CEO's were still prossecuted, the richest shareholders responsible for mismanagement still lost money and people still kept their jobs so yeah...i'd say it's more than possible.
And of course this is not the end all of legislation for these things.
Companies (and ESPECIALLY banks) simply shouldnt be allowed to reach such massive sizes, and antitrust laws were already put in place before (by laissez faire economic liberals, like Bush Sr. of all people!) to guarantee economic stability and worked very well to guarantee economic stability, before being taken down by more neo-liberal thinking people (definition: people who think the state should not interfere in the economy but then need to have the state interfere in the economy constantly to save major companies because otherwise we get mass unemployement)
Companies getting too big are a risk for the economy, reduce competitivity, (thus increasing prices) and are harder to audit due to their enormous complexity thus their size should be capped. If they dont like it too bad...better THAT be the cost of doing business than constant unchecked illegal behaviour and whole societies going bankrupt trying to save something that built itself too large and now wants everyone to pitch in.
If a private company cannot be allowed to go bankrupt it shouldnt exist in the first place, that's the nature of a free market.
Cancelar
Responder
If companies are people then the people in charge should be denied the protections of incorporating.
The 'people in charge' must make decisions to benefit the shareholder; it is their very job and purpose. It is the shareholder that constantly demands a profit on their investment that is ultimately responsible. This is why I believe the very concept of 'investing' will soon be challenged.
Fair, but the whole concept of "corporate personhood" exists under the premise that it's impossible to prosecute every single shareholder for every crime the whole company may have committed. That said, there are instances where courts can "peirce the corporate veil" and prosecute individual executives directly and put them in jail. Regrettably, I don't know much about how this process works as of yet.
@DistrustHumanz Constantly getting the company sued or fined is not in the interest of the shareholders. Corporations are legally obligated to act in their interests of their shareholders, but they are also legally obligated to follow the law. If the two are in conflict, then "bringing value to shareholders" is not an excuse - that one must be suspended in the case of illegal or irresponsible activities.
@@jeffbenton6183 Corporations are not legally obligated to act in the interest of their shareholders, although it is usually a pretty good idea if you don't want to lose your job. The "interest of their shareholders" is a very nebulous term that can mean almost anything so legislating around that is impossible.
Criminal liability should be unlimited in "limited liability" corporations. It isn't currently.
Funny inside story about HSBC…
I was working with an employment agency who employed one of its formers directors as a coach - and that person was involved in my search for AML roles.
They explained that when the US Treasury fined HSBC it actually (excuse me if I translated wrong here) indebted HSBC that amount and “structured” that debt for the Bank. What this ended up meaning was that HSBC could only use the money it would have paid its director’s bonuses. Directors started dropping one after one, and this apparently made the burden on the remaining of them larger until they were paying the bank to work there. Only once they all got out that the Treasury only graciously let them pay with other means…
Don’t f!%$ with the US Treasury is the ‘long story short’ version of it!
That's actually quite interesting, so the people at the top were getting some sort of penalty even if it wasn't a on a level that could be seen as justice for the actual crimes.
So how I interpret this… HSBC was only fined the amount they paid in Directors bonuses. So to get around this, the Directors took early retirement (and they get a good redundancy payout!) So that HSBC had less and less of a fine to pay. I bet the Directors retired on a Friday and became a “freelance advisor” or “ambassador” that’s “sub contracted” by HSBC on the Monday.
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😂😂😂😂@@alexasecas5930
Yeah, I've always wondered, why not jail the decision makers of the company? Like CEO's CFO's Majority stake holders, etc.
Mostly because those individuals have apparatuses behind them which prevent such actions. Sort of like how the head of America’s first central bank (decades prior to the Federal Reserve) refused a direct order from President Andrew Jackson. Andrew Jackson thought that his position as President, where surely he could just order the military to arrest the head of the central bank, but he couldn’t, for complicated power politics reasons related to Congress writing that bank into law and having a lot of allies in Congress.
@@evannibbe9375Andrew Jackson Btfo. Central Bank +1
Because they have plausible deniability, lawyers and aren't like James Bond villains.
The right thing to do when a company breaks laws, is to do an _actual investigation_ and hold the individual people responsible.
Fine the company as an entity, only to pay back damages caused.
Imprison the employees and executives who were knowingly breaking the law.
This isn't complicated.
The problem is that rich people can pay off lawyers or threaten other members of the judicial system. There's also the black market: rich people can pay some criminals who don't fear dying or going to prison to do things to lawyers, judges, police officers, or just people they don't like.
If a company repeatedly and consistently breaks the law, the government should step in and claim the business. Keep it's doors open, but remove the needed personnel. Make the changes to get the company to comply, and then hire a new set of executive/management who won't make the same mistakes.
How would you sell that to the public though?
Yeah, the Feds firing people and cutting bloat. They're so good at that.
@@bojackhorseman4176 the public will get residual checks.
That's basically how they deal with banks that go under. This just broadens the horizons on our social insurance
Lol, heck, fing NO. Government, anything is worse and more corrupt.
I've said it before and I'll say it again: Private equity ruins everything. First step is heavy regulation of that industry.
2008 was caused by publicly traded companies
Come to think of it, private equity is kind of like war in that regard.
It's great for the economy... until it spills out onto your own territory and starts ravaging your vital infrastructure.
It doesn't ruin _everything,_ but it ruins enough stuff to be a noticeable problem.
Most businesses aren't robust enough to constantly maximize shareholder value, so they don't go through the IPO process.
Circumventing that and bringing the company into the public sphere through an intermediary might look like free money with no obvious drawbacks, but in the long term it just exposes you to the same risks as a publicly traded company.
@@tomlxyz He didn't say that private equity is the reason behind everything bad. He said that private equity ruins everything it touches.
Parole officers for corporations is such a good idea. One such entity is already dropped on Infowars. Which means we not only have the will, we also have the precedent for the means.
No.
@@MatterMadeMootYes corpo shill
I have an idea. Put the c suite in jail since they did the crimes. Strip the shareholders of everything since they're the owners and the buck stops with them, and then run the company at cost, providing better prices for consumers and better wages for workers. We're just not generating surplus here. Operate this way for however long they were sentenced, and afterward, there can be a new public offering where shares can be sold, and the workers get even more!
so if your 401k includes shares in said company your shares just evaporate out of your retirement fund? that will go over really well.
@@ronblack7870 You shouldn't put more money in one business than you can afford to lose.
@ronblack7870 It'd be an incentive for shareholders to ensure those running their business are following the law. But perhaps there is a carveout for employees. At the same time those still working there are getting a substantial raise since the c suite and the shareholders won't be sucking most of the value out of their work.
With the case of wage theft for example, why do they have to go for the corporation as a hole? can't they go for the specific individual witch is responsible for those actions?
just because one is part of a group, it shouldn't be a justification to be invincible :/
This is covered with the idea of corporate obfuscation. HMW briefly mentions this idea in the section about the ability for corporations to defend their actions from outside prosecution.
We really need an app that has an executive blacklist, and if you try to buy things from a company who's employing someone on the blacklist, then it informs you it's blacklisted. This could be as simple as pointing a camera at shelves, it detects the brands, and then outlines them in red or writes "blacklisted" over it. You can then tap it and see what executive, and what company they were working for, and the crime committed and whether they evaded punishment or not. If obfuscation was used or someone was made a scapegoat, then all the executives are added to the list. If evidence comes out about which executive was responsible and it went to court and they were punished, then only the executives involved would be added.
Their perception of invincibility stems from the ease with which a corporation can distance themselves from a "bad apple" employee who commits something like wage theft. You did exactly that with your statement by asking why go after the corporations if you can just go after the "bad apples" that actually commit the crimes?
Ask yourself, what if the reason those bad apples got to do such things is because the company's corporate policies and demands from investors created a culture that promoted and allowed it to happen in the first place? A corporation can easily just publicly fire a couple of people and wash their hands of the issue because they "dealt with it."
RICO was specifically invented to PREVENT organized crime from structuring their criminal liability like this. It's a terrible idea.
Here is an idea:
Bring back "Taxable Offence."
Not only does it cost your company a % of your profits, but it is applied for *Decades* to come.
Another is to exploit the loophole in the 13th:
Imagine if these big companies where forced to carry out government contracts... for free!
Ooh! I like that last one. Make the minimum period of providing free products and services 100 years, AND make it a poison pill, so that if the offender gets bought, the new parent company takes on the burden for the remainder of its period as well. If they're bought out after 20 years, the new owner owes 80 years of free products and services.
For context, when were taxable offenses stopped in the US? What were famous examples of them being used?
I love how we have to think about the companies so hard but when a family gets a fine (sometimes for things they didn't even have a hand in) it's "tough luck" pay up, even if it costs you your house. And then the companies fire/lay off people anyways... 🙃
Okay I actually don't mind this solution. It's very long term, but say. For every major case a corp lost, in addition to the fines to cover damages, they had to accept another board member from the govt.... That would be a round about way of slowly nationalizing any corporation that acts in opposition to the public's well-being. You wouldn't even need to entirely nationalize them, just like nationalized ~enough~ to rein in their corruption. Sure, you could say that the corp would just corrupt/buy out the new board member, but the extant board members were already corrupt (literally evidently). This would reduce the power of the C-Suite by bloating their numbers as well and the outside influence could actually tank their ridiculous compensation packages by virtue of there being less corruption and their "work" being divvied up more. It's like socializing a corp from the top down instead of/in addition to the typical worker-led movements. Also I love the irony of micromanaging the people at the very top. That's just karma lmao
Reforming criminals is only one aspect of prison. Another is separation to keep criminals from doing more harm. Retribution is another, critical role - to make the aggrieved parties feel that justice was done so that justice isn't taken into their own hands.
Prosecutors overstepping their bounds, ignoring the law, destroying companies? Never!
12:34 I mean, I think we should just take their private company and make it public, but this is a start
My first thought on companies being too big to fail or jail is “clearly they’re not being taxed enough”-but I am anti-monopoly.
Making it easier to prosecute companies is a good first step, but I think that “if corporations insist their people” can be taken a liiittle farther. Like requiring more preemptive transparency about their actions and requiring them to publicize their work and the consequences of their own actions instead of lionizing their reputation.
Until CEOs, Board of Directors & other executives are held specifically accountable with long jail terms and a forfeit of all stock holdings where the government takes ownership of their equity.
If a human would go to jail for an equivalent time, split the jail time among all shareholders. This could mean a mandatory ethics course for small investors. After a few sessions, people would seek out ethical investments.
Dude arresting some semi senile 80 yo who barely watches a mutual fund is moronic. The whole point of corporations is limited liability. If you remove that then they are quite literally pointless and you may as well not have them
@@badart3204 You could have ethical mutual funds where the fund manager is liable.
@@badart3204 wow kinda like detaching consequences from actions is a net drain on society. Who woulda guessed.
Absolutely YES. It's bad enough companies can get out of paying out fees/fines through bankruptcy court and no one gets held accountable. Hold these presidents/ceos/board members accountable for the intentional and malicious actions. Monetary punishments do nothing anymore.
I think we need to have a huge round of trust breaking and make almost all companies medium sized or less. With that situation not only is there more competition but also no company is too big to fail and if they violate the law you can shut them down. The current system also makes it easy for larger players to keep others out of the market while if you had lots of smaller companies that would not be the case.
Hmm when I worked in healthcare, we did investigations on all safety incidents. It should be pretty possible to prove cuts resulted in death. Particularly with discovery, as we've seen many people write their crimes in emails. There are many memos and conversations that will have discussed the cuts and concerns.
The problem with any corporate punishment is that the people inside the corporation who made those decisions can still leave and conduct their business elsewhere possibly committing more crime in the process. Meanwhile they leave behind rank and file workers at the old corporation to face the wrath of whatever bureaucrat lands inside that boardroom. At some point, it's the government's responsibility to find the individual(s) responsible for corporate crime.
Considering the purpose in forming a corporation, it may be worth certain offenses voiding the corporate veil as part of the punishment.
I know two ppl who needed extensive hospitalization in recent years and both contracted staph infection during their stay, one died from it and one lost a foot. Hospitals are one of the most dangerous places to understaff to squeeze profit. And on the judge saying he doesn't intend to affect people's jobs (lives) by punishing banks, you don't hear that about the mass incarceration of black fathers.
How about getting private equity completely out of emergency health-care systems? Yes, it would create a shock to industries, but a shock is what the US needs ultimately.
Regulations and fines as cost of doing business means legal for a fee for big business and bankruptcy foe competition
One potential issue with having a parole officer on the board is that other companies won't be so handicapping a company that provides necessary services at a disadvantage might just make them go under.
Corporations could put in jail by prohibiting them from doing business during the period of the jail time. If some of the employees don't get paid during that time, well, that is the incentive for employees not to engage in any illegal transactions. Of course there will be innocent employees who had no knowledge of a companies illegal behavior, but the judge could order the corporation to continue to pay those employees for the duration of the sentence. This method of punishing corporations could work if there was enough public support.
Maybe they should do to companies what they did to Gary Bowser, garnish their income for the rest of the company's life. That way if they keep stacking up on crimes, the company will enter a slow decline and be replaced by other newer companies without rocking the industry.
The big issue causing so much misery for so many people now was again touched on in this video: Corporations being beholden to their shareholders above all else. Get rid of that, get rid of the power to siphon value off for essentially nothing put in, and you'll fix the majority of the problem.
Been saying for years if they are people then they have to serve time. As in the ceo, board memebers, etc. they all go to jail
If you have a child, and it commits a crime, the parrent can be held responsible. If you have a dog, and it commits a crime, the owner can be held responsible. If you have a company, and it commits a crime, the owner should be held responsible, not just the director.
The UK company that I worked for was dependent on our parts supplier in SE Asia. Our business was suffering because our stock was running low. We were desperately waiting for a container ship to deliver the stock we needed…. It sailed straight past the UK without stopping and didn’t unload one container! When we contacted them to find out what the f*** has just happened to our order? The shipping companies excuse was “it’s cheaper to pay the non-delivery fine, than pay UK import fees :shrug: “
Yes. And if they do something bad enough, they should get the "death penalty," which would mean getting dissolved and having their assets seized. Why should companies get all the benefits of a person but none of the punishments?
It's really important to hit the profit of the owners instead of the salaries of the enployees. With public companies, you could mandate a negative dividend, directly hurting shareholders.
About the excuse that "we were just following our mandate to maximize shareholder value", how is that an excuse to knowingly and willingly commit a crime? I couldn't say that I robbed a bank because I had a mandate to feed my family and keep a roof over their head - they'd tell me I should get an honest job instead. So why aren't corporations required to find an honest job instead of using illegal means to increase profits?
"Only following orders"? That's the oldest excuse in the book.
Having a man on the inside seems like a possible idea on the surface, until you consider:
-How to avoid corruption of that inside person?
-Where is the line between holding a company responsible through this representative, vs. government overreach in the decision making and business/operations of the company?
These are the two obvious problems that could be leveraged by, for example, private equity.
A punishment slide should be instituted: From first violations to last: meaningful fines with Required oversight (though that has corruption pasted all over it), imprisonment of convicted executives, and dissolution of charter. Probably some problems with that, but the executives should definitely be tried and if found guilty imprisoned. People making evil decisions should think twice and prison could be a deter such behavior.
The problem with fining HSBC for money laundering was the amount they had to pay was less than a weeks business to them. A drop in the ocean that they didn’t miss.
If anything they pass the cost down to the customer. In the UK, HSBC then pretended it was acting tough on money laundering by then screwing over the little guys, like closing the business accounts of genuine law abiding family owned shops without any warning because they didn’t borrow enough money or the closing the account of an elderly grandma because she doesn’t make enough transactions (true story).
Go after the board of directors and the CEO. They are at actually responsible and it does not matter if they are new to the position or have been there for years.
This is why the new EU fining method is far more devastating for corporations
The fine starts at 10% of global revenue
Accountability is key, and the idea of a "parole officer" is fascinating. It's a shame, though, that in this country, our regulation requires regulation.
It's simple, just take at least 50% of all shares, then resell them at the market price, this way the shareholders get a fine that is far more proportional than just arbitrary small fines.
Theory: Don't only fine the company... fine the shareholders as well.
Should a crime be committed, require a 20% (number debatable) new share offering. Shares go to the government who sells them on the open market in fixed amounts over the next 3-12 months. This aligns the shareholders with the legal requirements... the dilution event reduces the value of the previously outstanding shares.
Related, all companies over $SOME_VALUE should be required to be publicly traded. $SOME_VALUE is somewhere in the $1-10bil range.
There's an easy solution here; when a company does something illegal, make the individuals criminally liable. That is to say, you don't just fine the company as a whole, you find out which individual staff members made and enacted the decisions, and then you hold those individuals accountable.
This 'corporate personhood' idea was not well thought out.
What is dumb is that there is a clear middle ground; a fine that is so large that is not worth breaking the law but small enough that it wont make a healthy business collapse would work at preventing most law breaking.
Another solution might be to make those fines recurrent, and cumulative. Make the companies pay them every quarter, for a number of years, and the more they break the law, the more they have to pay, until they go bankrupt. This will provide some incentive to fix things, instead of just considering the fines a cost of business.
Why can't a corporate equivalent of liens be placed on the books? Or what about putting the market equivalent fine amount of stocks into government's hands?
Do too much bad, and you'll just be handing your profits over to the (hated by shareholders) government.
That'll align all the stakeholder-hood real fast.
Make CEOs personally criminally liable for any actions taken by the company unless there is proof of a particular employee's wrongdoing?
I like how a lot of these videos' solutions come down to "we need better regulation", which flies directly in the face of two of the three prevailing political ideologies in the U.S.
Engineers and doctors can get sued, have their licenses revoked, and otherwise get in *serious* trouble if they screw up in a way that harms people and/or the environment. The same should be true for businesses, businessmen, and politicians. They should not be free from accountability!
Some of these companies genuinely are “too big to fail.” The question should be: how did we let them get this way, and what can we do to break them up without disrupting regular people?
I say we treat companies like people. So if the company commits crimes that would put a normal person in jail, fine. We give the C-Suite a choice. You go to jail and we impose a fine on the company, or we nationalize your company for the term of the sentence and replace you with our own people. If nationalization is not possible then the C-Suite just goes to jail and the company pays a fine. No more shielding those responsible for running the company. If the company was nationalized then when that sentence expires the company will be de-nationalized. So companies like HSBC won't necessarily be "taken down" but they will fall under new management, one way or another.
Possibly the fine could be paid in ownership, if a company is charged the government takes a percentage of shares from all owners. That way the company doesn't shut down but everyone who profits from it loses some or all of their investment. Plus the government now owns some or all of a business it can recoup the money from over time.
Companies should not be fined in flat monetary amounts, but in ownership. Companies should be forced to issue shares to the government equaling a given percentage of their ownership for every offense committed (with the percentage depending on the severity of the offense), and and the government should be legally mandated to hold onto those shares until the company goes for 10 years without committing another offense (after which all shares owned by the government can be sold). If the company commits so many offenses that the government has more the 5% ownership, then the whole company is nationalized.
This would result in shareholders forcing the companies they own to stop breaking the law in order to protect the value of their stock.
Well, whenever they put a husband and father that provides for his family in jail, that causes financial hardship for the household he presides over. Whenever they put a single mother in jail, that creates a hardship situation for her children who now are either put in the system, or handed over to a relative that may or may not be particularly good for them. Lawyers and lawmakers never seem to be hesitant nor concerned about those scenarios, so why have they been so quick to lick the self-inflicted wounds of big business when they commit their wrong doing? Yes it would be unfortunate to have jobs lost, but at least these businesses would be held accountable, which could lead to things like reforms and better business practices
Corporations have legal guardians called CEO’s and board of directors. If the U.S. two tier system was based on “we the people are created equal” then just like animal owners can be held liable for their animals then the people who are responsible for the actions of corporations would be held accountable for their actions(CEO and board of directors). But the reality is that corporations being people has the point of insulating the rich from consequences for their actions. Notice that selling the corporations insulated the wrongdoers from consequences by passing the responsibility to the new owners of the corporate beast. Like if you owned a dog that killed people and you sold it so the new owner would be held financially liable while you go on without any repercussions. Two tier creativity of the lawyers and legal system will never be defeated because the point is to insulate the top tier citizens from consequences. (Think the Sackler family, almost got them but their friends in the two tier justice system gave them golden plea deals). The reality is the corporate entity is the solution to the wealthy facing consequences for their actions and you are not going to convince the system to change the solution to the problem.
Ae have a similar problem with illegally obtained evidence (e.g. violations of the fourth amendment of the Constitution of the United States). When evidence is attained without due process, or through police overreach, it becomes challenged in court as inadmissable, but this often means a wrongdoer will escape conviction. And we really don't like to see serial killers walk free. (We don't like to see petty shoplifters walk either, really.)
As a result, we've carved out so many exceptions that allow illegalpy obtained evidence to be admissible that by the 2010s, the fourth and fifth amendments have all but disappeared. (Police regard an invocation of the right to remain silent as an admission of guilt.)
The thing is, wrondoers going free is supposed to be a penalty to the state, even though it can also endanger the people, the current security state and loss of privacy _also_ endangers the public. So the state is choosing to cheat, to evade consequence of its own agents.
So likewise, when too-big-to-fail corporations commit wrongdoing that results in loss of life, in destruction and cost, it should _also_ be a penalty to the state when that company is liquidated, and jobs and services are lost in mass. That would make for a strong incentive to regulate companies, and assure those regulations are enforced. Otherwise, the notion of fair play in the capitalistic model is shattered, and we serfs know the aristocrats are feeding us a line. Discontent and civil unrest follow.
At this point, millennials, zoomers and even alphas are pretty sure there's no security, no upward mobility, no hope for social safety nets, which is one of the reasons fascist mythology appeals so much, and fewer people are interested in sex or romance. Suicides and rampage killings rise with hate crimes.
I feel fairly certain that you can sum this up with one simple phrase......
"you get just as much just as you can afford!"
Honestly speaking if you are a Fortune 500 company you own the justice system!
How I see it… if a State Military breaks Intl Law, they just go after the State but also the individuals in charge. It isn’t perfect but this one method to be practiced more. Also, fines shouldn’t be one time thing but rather a multi-year fine on top of due taxes.
These companies aren’t actively helping these parties
They have processes in place to not only stop actively helping but actively stopping any business with these parties, but nothing perfect.
No, the reason they are artificial people(not actual people), is for the flash and blood humans to avoid punishment. How about just making the person who has authority, responsible.
Why not percentage based fining? Make it tied to total revenue not profit and ensure it always goes to the parent company if it owned by another. 5% from any company will always hurt but necessarily bankrupt them and the larger the target the higher the risk of being prosecuted incetivising businesses to be more careful as they get larger.
Drug dealers sell drugs, and when found out they go to jail.
Businesses fraud people and don’t sell products, and when found out nothing happens.
Makes sense.
A very easy solution is to have a “head guy” or guys for each company or division of a company who does take the personal liability for crimes done by their subordinates. Replace plausible deniability with plausible responsibility. It IS your job to make sure your subordinates are behaving legally.
Hospitals shouldn't even be run/owned as companies anyway. They should be federal, state, and local government run period.
Catch-22 of modern politics. You can do the right thing, but a lot of the time, that means upsetting the existing tenuous balance, which usually causes economic damage in the short-term. A drop in the economy now means that you, as a politician, don't get elected by into power later when voters go to the polls.
Most everyone says they'd like to see corporations (and politicians) held to the same legal standards and consequences as a regular person, but your average voter would just as soon scream bloody murder when the economy dips during a course correction and panic elect more corrupt officials back into power to undo or soften any gains made.
Fines should really be escalating tbh. Increased by 1000 % *EACH* time the same law is broken. Like: OSHA violation? 2000. Again? 20000. Again? 200000. Too expensive? Well, better start following the rules then? Similar with theft. Just apply treble damages. Bank steals 15 millions? Well, get ready to pay back 45 millions, instead of keeping 98 of the loot %.
I don't like the wage theft argument that somehow since wage theft was 50 billion, it's worse than other crimes that caused less monetary damage. Buying uniforms they shouldn't, not getting paid for certain time worked, etc is all something that probably goes into an employees internal calculus about whether working a certain job is worth it or not. Therefore, the job will face repercussions in quality of work/worker. I'm not saying wage theft should be illegal, but it's not nearly as bad as violent crime or fraud.
A better way to deal with this is to take government out of the equation. If there is less way for hospitals to monopolize care then "cost cutting measures" will simply make the hospital less attractive if their prices do not decrease comensurately and they will be outcompeted by hospitals which don't have a paracitic third party decreasing their economic efficiency. The other side of the coin is anti-trust measures to ensure that competition continues to act as a natual selective force on the species of hospitals.
We won't get change until we change who our government works for.
Ranked choice voting is on the ballot in 4 states this year, including Oregon.
If we can get ranked choice voting, the politicians will need to appeal to the voters, instead of simply making you fear the other candidates more, or by out spending them (most elections by far are won by the candidate with the most money).
Last election, Sarah Palin lost in Alaska because more people voting wanted anyone else but her.
That meant a democrat won the election because she appealed to not only Democrats, but to the people who originally voted for the other Republican candidate.
Ranked choice voting allows you to finally vote FOR someone instead of AGAINST someone, and it means the candidate will need to work for we the people, instead of them the corporations.
@3:12 white man jumpscare
In the case fraud and money laundering, cases with clear cut wrongdoings if an employee was found to have direct knowledge of their illegal behaviour, then them and all the managers up the chain that were employed within the last 3 years should be facing the same prison sentence. This would lead to a situation where even if the behaviour continues, the groups of people involved will be much smaller and crime sentences handed out less severe. It could even get to a point of no criminal sentences but each member and their managers involved pay a personal fine tied to a percentage of their total compensation.
So corporations are people without responsibility beyond profit? I thought you were the accountability crowd. Do the crime, do the time.
Or maybe companies could be fined in the form of the number of accessible buildings they must abandon and make available as homeless shelters instead of fining them in dollars.
A "man on the inside" could go wrong in so many ways.
You could start with laziness where it is easier to look like you are doing something than to do something. Elevate that to bribery, where looking the other way becomes intentional. That can elevate to the point where government bureaucrats use this "man on the inside" job as a payoff for political favors, thus indirectly allowing the corporation to bribe the government.
It could also go wrong in the other direction. The "man on the inside" might know nothing and shut down legitimate activities. He might use that power to elicit bribes just to avoid interference with normal operations. It could even go to the extremes seen in Nazi and Communist countries where the "man on the inside" is a political officer insuring the company operates in the best interest of the party.
I'm not saying do nothing, but rather keep asking, "And then what?" to every solution and the solutions to the solution you come up with.
Structure the fines to be levied against the company and the executive teams. The put a 95% lien against all the income earned by anyone with any responsibility. Break their ability to earn money and make them an example, same for anyone who interferes with the investigation or was complicit.
Damn, company parole officers, along with fines is actually pretty good idea. That said, personally I would just want both fines, and all decision makers, or controlling investors that can be proven to be responsible for a crime, be put in jail. Even if responsibility is distributed, and you can't give more than few months. Being put into jail is going to o be pretty impactful anyways. Especially if large number of people go there at once.
Corporations are people: people that too often spit in your food, stand up from the table, loudly fart, leave no tip, and leave as you sit there in their fouled atmosphere.
if fines are the best way, make repeat offenders fines exponentially higher, until they stop, first time, 1 million, second time 10, third 100, fourth 1B, etc(example), and check them more often to make sure they changed their ways or go bankrupt, their choice
Just arrest all the present and past CEO's as well as shareholders, I know it's unrealistic but boy would it be super funny :D
9:10 That bit about the fines being the politically safe option.... could this be an extremely mutated version of political correctness?
All the parts are there, you're essentially softening a traditionally harsh measure for the sake of not hurting a minority/vulnerable group, and the outcome is a convoluted system that we all end up paying for with mental effort or money.
I… hmm. Rich people are an actually protected class in the US, while minorities are like, technically protected, but to get any of those protections is like pulling teeth. Meanwhile, if your bottom line gets harmed, the US government will trip over itself to punish those responsible.
If you get your DL taken away because you repeatedly crashed your and others cars because your breaks are broken (ie having a sketchy employee or sketchy employees.) then that means you didn’t fix or detect the mistake the first time. Which means you shouldn’t be allowed to have a vehicle. The blame still rests on the companies shoulders
I feel like this issue has been made harder than it needs to be. Let's take the example of a company, let's call them Widgets & Stuff, that knew they were making a product that could poison a subset of their customers. They knew about it and decided that the cost of a recall and remanufacturing would be higher than the estimated costs of lawsuits and fines after the fact. Nothing in the video says that you can't hold the decision makers criminally responsible for actions done in the name Widgets & Stuff. While you can't literally put handcuffs on a company, the decision makers (regardless of if they have since retired) are quite capable of occupying a jail cell.
Whether it is a Sole Proprietor, C-Suite, or Board of Directors, there is a group of people at a business that are responsible for decisions, and they should bear the consequences of those decisions. I don't even think that they should have a claim of 'I wasn't a party to that decision,' 'I didn't agree to that,' or 'I didn't know.' The final decision of the company is the decision of the whole and it was literally their job to know. If they didn't agree to a decision that would harm people, they should have reported it to the proper authorities before it could harm people.
When Widgets & Stuff gets busted, the legal ramifications would leave the company without a Sole Proprietor/C-Suite/Board of Directors, but a company can bounce back from that even if it is a buy out from a competing business. It is not the burden of government to protect businesses from their own actions; it is the duty of government to protect the populus from businesses.
On a positive note EU has fined Facebook millions of dollars multiple times by now and even made it into law where multiple transgressions can be fined without the need of a court case each time, in other words repeating corporate offenders will get the stick without the chance to complain about it. This has resulted in lot of tech firms abiding with EU user privacy laws because while a couple of billion once might not hurt a big company, couple of billion every single year will.
I think companies that are publicly traded should be “fined” in shares; break the law and hurt people and 20% of your company now belongs to the government. This means that shareholders get hit for a significant chunk right off the bat as more shares exist so the shares they have are worth less, since the company is beholden to the shareholders, they now have a fiduciary responsibility to the government directly, and since shareholder value has been reduced by a significant chunk, C-suite people have a duty to avoid anything that would get them in trouble because it would reduce the short term gains they’ve been trained to maximize. Of course, repeated fines would result in the company being owned by the government, so to reduce the probable misuse, there would have to be a specific branch restrained by specific rules to handle the influence of the shares owned by the government. Kinda like the dealer in blackjack, there would be specific actions proscribed for the handlers of the shares to take.
Corporate personhood shouldn't be a thing. Yes, they need to be able to enter into contracts and be able to enforce them via civil courts. Beyond that, not much. No political donations (conflict of interest right there). No PACs. No hiring of politicians leaving office. Basically get rid of the stuff that makes corporations seem to have more rights than natural people.
It is interesting tho, SBF went to jail, but only because he defrauded powerful people who could spend the time to prosecute him. Class action suits are supposed to allow smaller people the luxury of behaving in such a way, but it still takes an enormous toll on normal folks to see thru a prosecution of a business entity. Lifetime bans on doing business sometimes feel like one of the more powerful tools we could leverage. An architect can have their license revoked for bad work and be effectively shut out of the industry perminantly. It's another tool in the tool kit.
the richer a company gets, the less tax, wages, and legal settlement costs. You can only fail upward. Organizations don’t exist in a vacuum. If we continue to pretend the people in these organizations don’t deserves jail time, the system will keep working as intended
instead of a single fine, why not: 1) ensure that the board & shareholders aren't allowed te enrich themselves further (wage increase/ dividends / "company retreats") for a period of 5 years (even if they move to other related-companies) 2) just like jail TIME make the company pay XX% (75?%) of their profits for X years (5?) as a fine 3) make sure they are audited not just by a big 4 / but by a governmental task force?
it is almost like we should proportion fines for crime committed in furtherance of profit to the profit gained from the crime. If a company makes $5 billion by committing a crime then the fine should be at minimum $10 billion
All fines, and I mean every single one should be a % of the person- or entity’s income/revenue (or whatever other metric is most appropriate)
Companies are too big to jail, the c-suite is not. You're either in charge, so deserve your pay and are liable for the systematic crimes of that company, or it's not your fault and therefore are not doing enough to justify your pay and conditions.
Jailing the c-suite for actual direct crimes (like money laundering) would surely be easier compared to demonstrating the consequence of say private equity practices?
Removing the company’s charter sounds like a good first step. That should be the default, it’s up for the company to seek leniency during the trial.
The prosecutor coming out and saying he’s not going to prosecute to the full extent of the law from the beginning is a conflict of interest to plaintiff.
**The law is a deterrent not a chain.** If the fear of charter removal is always on the table it deters all future transgressions.
Small business makes up the majority of economies. It’s time our legal system reflects that. If corporations are people; then those people are directly impacting the majority of the economy. Idk man, why don’t they ever get in trouble for that?
The solution is adding a government employee to a company’s board? Oh great. Why not have the government take over management of the company completely! Can’t see how that can go wrong